Xi Jinping's Speech Was a Missed Opportunity

Wendy Cutler talks with CNBC

November 5th, 2018

Following is a transcript of a television interview that Wendy Cutler gave to CNBC.

Wendy Cutler: I view the speech today by President Xi Jinping as a missed opportunity. This was the world stage where he could have said not, you know, "I'm going to cut tariffs, I'm going to make a better business environment," but just add some specifics, send some signals to the Administration in an effort to kind of pave the way for both sides to get back to the table.

CNBC: You don't think he was sending a signal, a signal of defiance?

Cutler: No, because I think if he wanted to be defiant, his comments could have been a lot more cutting and aimed at the United States. I thought he kind of treaded around America's unilateralism here. And once again, I think he wants to portray China as open, as the global trading champion, and the anti-protectionist force — which was met by skepticism, I'm sure, by many of the businesses in the room.

CNBC: So when you think about how this can get resolved — if it can get resolved — how are you handicapping the situation? And just to put a fine point on it: Obviously last week at least there was a report in a sense that a deal was in the offing, and yet there's a lot of skepticism, including from people like Larry Fink of BlackRock, who think we are headed into a trade war, if not a cold war.

Cutler: Yeah, there are a lot of confusing signals being sent. I think one part of the Administration would like to get back to the table with China and try to work through these issues. Others seem to be more focused on continuing this trade war in an effort to build U.S. leverage, and perhaps decouple the two economies. And the president is going to have to make his decision on which path he wants to follow. I think the most optimistic outcome for the upcoming meeting between the two presidents would be an agreement to go back to the negotiating table, and to try and work through these issues. However, they would need some guidance from both presidents on which issues they're working on, what they're going to do with the impending tariff increases and perhaps further tariff imposition.

CNBC: But Wendy, speak to China specifically, because I know this is your expertise, in terms of the ways the Chinese are thinking about this, and in terms of how much pain they can take in the short term, relative to whatever you think their long term strategy is — given that we know that they have a 2030 plan, they have a 2040 plan. These are long term thinkers, but they also have their own social issues to contend with, and economic issues.

Cutler: We shouldn't underestimate their wherewithal. Their economy is clearly hurting, but a lot of that is for their own kind of domestic reasons. The tariff increases haven't helped. I do think that China does want to come back to the table, but does that mean it wants to concede on all the issues that the United States has put on the table? No. But we'll never find out if both sides don't get back together. And I think both sides kind of owe that to their companies, workers, and consumers, or else we're going to be seeing additional impacts from the tariff increases, and further tariff imposition and other measures that could be taken come January 1 and onward throughout 2019.

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